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Wednesday, 24 October 1956

Sir ARTHUR FADDEN (McPhersonTreasurer) . - by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to put an end to inquiries by intending purchasers of land to ascertain whether or not any Commonwealth land tax is owing on land which is being purchased. Honorable members will recall that the land tax was abolished by legislation passed by the Parliament during 1953. The last financial year for which the land tax was imposed was the financial year 1951-52, the assessments being based on the value of land owned at 30th June, 1951. However, when the legislation relating to the land tax was repealed, provision was made for its continued operation insofar as it concerned assessments of land tax for the financial year 1951-52 and prior years. This saving provision was necessary in order to ensure the collection of outstanding land tax in respect of those years.

One of the provisions of the Land Tax Assessment Act which has a continued application makes unpaid land tax a first charge on the land subject to tax. The charge may be registered with the appropriate authority in the State or Territory where the land is situated. Alternatively, a caveat may be lodged in respect of the unpaid land tax. By the same provision in the Land Tax Assessment Act, a purchaser of land is made liable for any tax owing by the previous owner in respect of the land unless, at the time of purchase, the purchaser made due inquiry from the taxation office whether land tax was owing. Having regard to this requirement, it is an almost invariable practice for an intending purchaser or his legal adviser to institute such inquiries.

Since the imposition of land tax was discontinued, practically all arrears of tax have been collected and a relatively small amount is now outstanding. Nevertheless, inquiries by and on behalf of intending purchasers continue, and the administrative and other costs are out of all proportion to the tax that remains to be collected. In order to obviate these inquiries and the consequential administrative and other expenses, it is proposed, in this bill, to provide immunity from the land tax charge to bona fide purchasers for value even although due inquiry is not made of the taxation office. This immunity will apply in respect of land purchased on and after the date on which the bill receives the Royal Assent. It will not extend, however, to those lands in respect of which, at the time of purchase, a charge has been registered or a caveat has been lodged on account of any unpaid land tax.

Debate (on motion by Mr. Calwell) adjourned.

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